Chhattisgarh High Court Denies Bail To Accused In ₹ 411 Cr Procurement Scam; Says There Exists Connivance Between Private Company & State Officials

A Bench of Chief Justice Ramesh Sinha observed, “In the present case, since there is a connivance between a private Companies and the officials of the State, it cannot be ruled out that the applicant would not try to tamper with the evidence or influence the witnesses. Economic offences constitute a different class and need to be visited with different approach in the matter of bail. The economic offence having deep rooted conspiracies and involving huge loss of public funds needs to be viewed seriously and is considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country.”

The Court added, “Granting bail to the applicant at this stage would not only embolden corrupt practices but also send a highly detrimental message to society, undermining public confidence in the justice delivery system.”

Senior Advocate Siddharth Mridul appeared for the Applicant, while Deputy Advocate General Dr. Sourabh Kumar Pande represented the State.

Brief Facts

The Applicant was arrested in connection with an FIR registered under Sections 409 and 120B of the Indian Penal Code and Sections 13(1)(A), 13(2), and 7(c) of the Prevention of Corruption Act, 1988. The case concerns the purchase of medical equipment and reagents under the “Hamar-Lab” scheme implemented by the Public Health and Family Welfare Department, where the procurement was allegedly done without budgetary approval or proper demand assessment, causing a loss of approximately 411 crore to the State.

According to the State, the Applicant, director of Mokshit Corporation, colluded with other companies and CGMSCL officials to rig tenders, inflate prices, and supply near-expiry reagents and equipment, including CBC machines priced at 17 lakhs that were otherwise available for 5 lakhs in the market. It was further alleged that the machines were closed systems, effectively creating a monopoly for the Applicant to supply matching reagents.

The Applicant contended that he was merely a supplier selected through a valid tendering process and had no control over the decision-making of CGMSCL. The Applicant further submitted that the FIR misrepresented the pricing details, and that payments remained due from the government despite completed supply obligations.

The State opposed the bail, asserting that the Applicant was the mastermind behind the cartel, used influence to tailor tender conditions, and generated fraudulent invoices. It was submitted that several government officials had already been arrested, and that releasing the Applicant would risk witness tampering and evidence interference.

Reasoning of the Court

The Court noted that the case involved a serious economic offence resulting in enormous financial loss to the State, and that the alleged acts were committed through a deep-rooted conspiracy involving public officials and that investigations were still ongoing. The Court observed, “The non-applicant has still to investigate the case with relation to the involvement of the government officials/officials of the CGMSCL without whose connivance, the applicant could not have been able to secure the tender in question and that too, at an excessive rate.”

The Court noted, “Economic offences constitute a different class and need to be visited with different approach in the matter of bail.”

The Court referred to the Supreme Court’s decision in State of Gujarat v. Mohan Lal Jitamalji Porwal, where it had been held that economic offences threaten the financial integrity of the State and public confidence in justice, and must be treated with heightened seriousness.

The Court noted that the Applicant had, through fictitious entities and misuse of official influence, created a monopoly over supply of medical reagents. “The documents appended with the petition prima facie discloses that the investigation has established that the applicant masterminded an elaborate and well-orchestrated criminal conspiracy by creating multiple fictitious companies in the names of his relatives and close associates”, the Court added.

The Bench further noted that due to the closed system of the supplied machines, public health centres across the State were deprived of necessary diagnostic services, stating, “Because of such act, the people of the State are deprived of various pathological tests… which is a direct loss to the people of the State.”

Consequently, the Court rejected the bail application, noting that it was not a suitable case to grant bail to the Applicant.

Cause Title: Shashank Chopda v. State of Chhattisgarh (Neutral Citation: 2025:CGHC:24008)

Appearance:

Applicant: Senior Advocates Siddharth Mridul, Ajay Mishra; Advocates Pragalbh Sharma, Ruchi Nagar, Prashant Bajpai

State: Deputy Advocate General Dr. Sourabh Kumar Pande